A US bankruptcy judge Friday approved failed brokerage MF Global Holdings’s liquidation plan, capping one of the US financial sector’s biggest scandals since the 2008 financial crisis.
“After due deliberation,” this plan is “adjudged and decreed,” the court said in a document.
“The plan proponents have proposed the plan in good faith,” the document said. “The plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtors’ Estates and effectuating an orderly liquidation of the Debtors.”
MF Global had filed for bankruptcy protection in October 2011 after making losing bets on European sovereign debt that soured when the eurozone crisis hit.
The case sparked outrage when some $1.6 billion was discovered missing from customers’ accounts.
The company’s former chief executive, Jon Corzine, a former New Jersey governor and Goldman Sachs chairman, has come in for heavy criticism over his management of the firm.
An agreement with US banking giant JPMorgan Chase at the end of March enabled the liquidation plan to go forward.
JPMorgan Chase had accepted to pay $100 million to reimburse customers, while releasing claims on MF Global funds of $417 million and returning an additional $29 million kept in MF Global accounts.
The trustee overseeing the liquidation will use part of the money recovered from JPMorgan Chase to distribute $300 million.
That is expected to result in a restitution of more than 93 percent of the money due to US clients and between 75 and 82 percent of the money due to foreign clients, said the trustee.
US court approves MF Global liquidation plan
